Note 10 - Share Option and Equity Incentive Plan

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

10. Share option and equity incentive plan

The impact on the Company’s results of operations from share-based compensation was as follows:

	Three months ended September 30,				Nine months ended September 30,
(in thousands)	2020		2019		2020		2019
Cost of revenue	$	26	$	21	$	73	$	56
Research and development		159		132		451		244
Sales and marketing		213		332		354		910
General and administrative		702		498		1,789		1,464
Total share-based compensation	$	1,100	$	983	$	2,667	$	2,674

In November 2013, in connection with the Company’s initial public offering, the Company adopted the 2013 Share Incentive Plan, or the 2013 Plan, which provides for the grant of share options, restricted shares, RSUs and other share-based awards to employees, officers, directors and consultants of the Company. The 2013 Plan was amended at the Company’s 2017 Annual General Meeting of shareholders.

During the three-month period ended September 30, 2020, the Company granted 3,600 share options with an exercise price of $12.92 per share under the 2013 Plan. The weighted-average grant date fair value related to share options granted under the 2013 Plan during the three-month period ended September 30, 2020 was $5.85 per share. During the nine-month period ended September 30, 2020, the Company granted to certain employees and directors 454,001 share options with exercise prices ranging from $10.88 to $12.96 per share under the 2013 Plan. The weighted-average grant date fair value related to share options granted under the 2013 Plan during the nine-month period ended September 30, 2020 was $5.07 per share. Share options generally vest based on the employee’s continued service with the Company during the four year period following the vesting start date and expire after ten years. Share options granted to directors vest at the following annual general meeting of shareholders.

During the three-month period ended  September 30, 2020, the Company did not award any RSUs. During the nine-month period ended  September 30, 2020, the Company awarded 299,924 RSUs. RSUs generally vest based on the employee’s continued service with the Company during a specified period following grant as follows: 40% on the second anniversary of the vesting start date; 30% on the third anniversary of the vesting start date; and 30% on the fourth anniversary of the vesting start date. RSUs granted to directors vest at the following annual general meeting of shareholders. Share-based compensation expense for these RSUs is calculated based on the grant date market price of the shares and is being recognized over the vesting period.

For the three-month period ended September 30, 2020, the Company incurred shared-based compensation expense related to share options and RSUs of $613,000 and $487,000, respectively. For the three-month period ended September 30, 2019, the Company incurred shared-based compensation expense related to share options and RSUs of $658,000 and $325,000, respectively. For the nine-month period ended September 30, 2020, the Company incurred shared-based compensation expense related to share options and RSUs of $1.7 million and $962,000, respectively. For the nine months ended September 30, 2019, the Company incurred shared-based compensation expense related to share options and RSUs of $1.9 million and $741,000, respectively.

As of September 30, 2020, there was $4.1 million and $4.6 million of total unrecognized compensation cost related to unvested share options and RSUs, respectively. These costs are expected to be recognized over weighted-average periods of 2.4 years for share options and 2.7 years for RSUs.